Professionals in the equine industry want to be accommodating and affordable, yet the increasing cost of doing business makes that difficult. Prices continue to climb for just about everything–fuel, hay, feed, and workers. Unfortunately, professionals are often reluctant to seek rate increases. The question is how to raise rates in a manner that is both fair and legal. This article offers some suggestions.
Can You Legally Raise Rates?
For equine professionals considering a rate increase, an immediate question is whether they can legally raise their rates. Their contracts might hold the answer. Possibly, contract terms will delay rate increases. This was the case with one boarding stable’s contract that had a year-to-year term; while the stable saw benefit in committing its boarders for a full year, the stable took a financial risk by locking in its fees for a long duration. Contracts of that type may force stables to wait out the expiration of the term before they can seek higher rates.
The next question is not necessarily legal but practical in nature. That is, what is the proper amount of a rate increase? Chances are that no law limits the amount that a boarding stable or equine professional can charge as a basic fee. Equine professionals seeking profitable rates would be wise to determine their “breakeven point” (the “breakeven point” is the amount of income needed to meet a business’s typical overhead expenses and compensation requirements).
Reserving the Right to Raise Rates